The Importance of Social Contract and Full Disclosure for Organizational Culture
Social contract - it is an act which is created by some individuals where they agree to form a government based on social contract theories. According to these theories, government are formed for the accomplishment of a certain objective or when a group of individuals come together to form a group to achieve common social goal. In social contract priority is given to nature first. In social contract every individual is bound in a team and this team is bound to save nature. Social contract carries some rules and regulations that establishes a sound social system. All the individuals in a group or government have to follow the rules which is mentioned in the respective contract.
Social contract is equally important in the context of an organisation as same as other because in an organisation, many individuals come together to form a team for the fulfilment of common goal i.e. increasing the wealth of an organisation. In the past, the organisational legitimacy only considered in terms of economic excellence. But, this approach cannot be followed now a days because of changing environment. Now a days, organisational legitimacy is expected to consider various issues in including the environmental and social consequences of their activities. Now, there are many organisations which are doing various social activities other than economic activities. There are many firms which help NGO by donating the funds for the accomplishment of social goal. At the end of year, the organisation not only have to disclose their economic activities but also they need to declare their social activities also. There are some bodies which see over the social activities which are done by various organisations to protect the environment. Hence, we can say social contract is equally important in organisation legitimacy.
In general, if an organisation use fully disclosure policy and following the social contract then it will help the organization in making the stronger bounding with the society they will also know how organization is changing itself. Fully disclosure policy will also help the organisation to understand the perception and manipulate the perception of the society for the organisation by manipulating the perceptions organisation can also change expectation of the society. Fully disclosure can also be used as a strategy by the organisation to make people aware about the positive activities of the organisation. It can also be used to offset the negative news from the mind of people which are widely published.
